Squarespace Receives $7.2 Billion Offer to Go Private
Published: September 12, 2024
Squarespace has received a $7.2 billion offer from private equity firm Permira to take the company private. The revised bid, offering $32 per share, represents a premium over the company’s recent trading price of around $28. This move comes as Squarespace's stock has struggled since its IPO in 2021, and going private could offer the company more flexibility to focus on long-term growth without the pressure of public markets.
Permira’s interest in Squarespace stems from the platform’s strong user base and recurring subscription model. With over four million active users, Squarespace is a major player in the website-building and e-commerce space, catering to individuals, small businesses, and larger enterprises. Its comprehensive platform integrates website design, hosting, e-commerce, and marketing tools, which has made it a preferred choice for many looking to establish an online presence.
By taking the company private, Permira aims to capitalize on Squarespace’s potential for growth without the need to meet quarterly earnings targets or answer to shareholders. The private equity firm sees an opportunity to help Squarespace expand its offerings and potentially increase its market share, particularly as competition in the website-building industry heats up.
Squarespace went public via a direct listing in May 2021, valued at around $10 billion at the time. However, like many tech companies that went public during the pandemic, its stock has been volatile. Increased competition from platforms like Wix, Shopify, and WordPress, along with broader market concerns, have contributed to Squarespace’s fluctuating stock performance.
For shareholders, Permira's offer could provide an opportunity to exit at a premium. Those who have seen the stock’s underperformance since its IPO may be eager to take the deal. However, some investors might still see potential in keeping the company public, especially if they believe in its long-term growth prospects.
If the deal is finalized, it could have broader implications for the industry. Squarespace’s move to go private might encourage other companies in the space, such as Wix or Shopify, to consider similar strategies as they navigate competitive pressures and market fluctuations. Private equity firms are increasingly looking at tech companies like Squarespace as valuable acquisition targets.
For Squarespace, going private would likely allow it to focus more on product development and innovation. The company could explore expanding its digital tools and services, including new AI-driven design features and advanced e-commerce capabilities. With less pressure to deliver short-term financial results, it may be better positioned to stay ahead of competitors.
While the deal still requires regulatory approval and final negotiations, the offer from Permira signals a potential turning point for Squarespace. If successful, the company could enter a new phase of growth under private ownership, free from the challenges of the public market.